I had a good converstation with our realtor. He confirmed that the market has slowed dramatically. However, to keep this in perspective, the market has returned to how it was 3 years ago before all this speculation and flipping went crazy. So, the over-inflated market has slowed, but the bubble hasn't burst per se. He says that it is a "normal" real estate market.
There are several obvious implications. The most important thing to remember is that investors will still make money over the long term, but short-term investors are out of here. Many flippers have been walking away from $20,000 reservation agreements.
It is now a "buyers" market with so many investors trying to dump their properties. Those interested in actually owning property in SoWal (not flipping) will be able to get some great deals. (But keep this in perspective--a $100,000 reduction on a piece of property that is $300,000 over value, may not a great deal).
There is still a lot of money to be made and there are still a lot of opportunities.
Investors who were expecting to sell their property for twice as much as they bought it for 1 year ago, might have to "settle" for only 50% appreciation.
High end homes over $1M are sitting, but there is still demand for mid-level $500K + homes and condos. Developers are going to have to suck it up and lower their prices. Some developers are going to be stuck with much lower profits than they anticipated--their land prices were high, sales prices will be lower than expected, and to get the higher prices, quality will have to be high.
In my opinion, the slowing of the market is a relief. Everybody and their dog is a "developer" now. The real developers, who know what they're doing, will be fine. All the dogs will move on.
There are several obvious implications. The most important thing to remember is that investors will still make money over the long term, but short-term investors are out of here. Many flippers have been walking away from $20,000 reservation agreements.
It is now a "buyers" market with so many investors trying to dump their properties. Those interested in actually owning property in SoWal (not flipping) will be able to get some great deals. (But keep this in perspective--a $100,000 reduction on a piece of property that is $300,000 over value, may not a great deal).
There is still a lot of money to be made and there are still a lot of opportunities.
Investors who were expecting to sell their property for twice as much as they bought it for 1 year ago, might have to "settle" for only 50% appreciation.
High end homes over $1M are sitting, but there is still demand for mid-level $500K + homes and condos. Developers are going to have to suck it up and lower their prices. Some developers are going to be stuck with much lower profits than they anticipated--their land prices were high, sales prices will be lower than expected, and to get the higher prices, quality will have to be high.
In my opinion, the slowing of the market is a relief. Everybody and their dog is a "developer" now. The real developers, who know what they're doing, will be fine. All the dogs will move on.
